Marco Polo, the trade finance blockchain network launched in 2017 by R3 and TradeIX, is moving slowly but surely toward production.
The latest milestone in the 22-bank blockchain consortium’s methodical piloting process allows a third party to a trade (in this case a logistics provider) to trigger a payment to a supplier in real-time at the moment the goods are on their way to their destination.
This work builds on the first Marco Polo test transactions carried out in March of this year between two member banks – LBBW and Commerzbank – which executed a trade transaction between engineering technology firm Voith and KSB SE, a pump and valve manufacturer. This time, besides the two companies involved, logistics provider Logwin AG added data to the blockchain and initiated the payment obligation.
Gerald Böhm, head of guarantees and trade finance at Voith, said in a statement:
“For the first time, we have processed the purchase and delivery of special hydraulic couplings from Germany to Taiwan using blockchain technology. We executed this transaction with KSB, the leading pump and valve manufacturer, via the Marco Polo network.”
Ralf van Velzen, head of export financing at KSB SE & Co, added: “As a buyer, together with our bank we can ensure that the payment commitment becomes effective only if the goods are actually in the hands of the logistics provider, and on their way to the delivery destination”
Global trade and its transactional banking arrangements are hampered by data being locked in silos and in some cases paper-based processes. Getting participants on the same page and working together in real-time removes risk from trade networks.